Arthur Hayes Hails Bitcoin as Superior Safe-Haven Asset in Current Economic Landscape
BitMEX co-founder Arthur Hayes has hailed Bitcoin as a superior safe-haven asset in the current economic landscape.
In his latest blog post, Hayes delves into historical economic cycles and their implications for the present market environment, arguing that we are currently experiencing a local cycle of inflation.
According to Hayes, this makes Bitcoin a more attractive option than gold due to its independence from national control.
World is Shifting from a Unipolar US-Dominated Order
Hayes breaks down economic cycles into two categories: local and global.
During a local period, authorities often resort to financial repression to fund significant expenditures such as wars, resulting in inflation.
On the other hand, a global period is characterized by deregulated finance and promotes global trade, leading to deflation.
Hayes believes that the current economic landscape is marked by inflationary pressures and geopolitical tensions, indicating a local cycle.
One of the key factors contributing to this inflationary environment, as Hayes explains, is the shift from a unipolar US-dominated world order to a multipolar world order with emerging leaders like China, Brazil, and Russia.
As nations prioritize domestic economic stability, inflation becomes a pressing concern.
In light of this, Hayes argues that those who lack faith in the system and its governing entities turn to assets like gold or Bitcoin, which do not rely on the state for their existence.
“If you believe in neither the system nor those governing it, you invest in gold or another asset that doesn’t require any vestiges of the state to exist, like Bitcoin.”
Some good old fashion bull posting if ur sad and in need of hope for ur #crypto bags. https://t.co/AAVhACO83E
— Arthur Hayes (@CryptoHayes) July 2, 2024
Hayes emphasizes Bitcoin’s decentralized nature and its ability to facilitate fast transactions as reasons why it surpasses gold as a safe-haven asset in today’s economic climate.
He draws on historical examples to support his viewpoint, highlighting how previous economic cycles influenced investment choices.
For instance, during the Pax Americana Ascending Local Cycle from 1933 to 1980, the US financed wars through financial repression, leading to a preference for gold as an investment.
In contrast, the Pax Americana Hegemon Global Cycle from 1980 to 2008 saw deregulation and a stronger dollar, favoring stock investments over gold.
Bitcoin Emerges as Key Asset in Current Cycle
In the current cycle that began in 2008, Hayes points out the emergence of Bitcoin as a significant development.
“The wrinkle is that at the start of the current local cycle, Bitcoin offered another stateless currency,” he wrote.
Unlike gold, Bitcoin operates through a cryptographic blockchain, enabling faster and more secure transactions, which has allowed Bitcoin to outperform gold since its inception.
Hayes concludes by emphasizing the importance of understanding these economic cycles to make informed investment decisions.
Echoing Hayes’s bullish viewpoint, analysts from QCP Capital suggest that both Bitcoin and Ether historically perform well in July due to positive seasonality.
“Looking at seasonality, BTC has a median return of 9.6% in July and tends to bounce back strongly especially after a negative June (-9.85%),” they wrote in a recent note.
